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Chinese lawmakers review legal amendments to improve corporate governance

Xinhua | Updated: 2021-12-21 09:22
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BEIJING -- Chinese lawmakers on Monday started to review a draft revision of the country's Company Law to improve corporate governance and operations

The draft revision has been submitted to the ongoing session of the Standing Committee of the National People's Congress (NPC), the top legislature, for deliberation.

Consisting of 15 chapters and 260 articles, the new draft updates the current law by revising or adding around 70 articles. It stipulates the Communist Party of China's leadership over state-owned enterprises (SOEs) and improves rules on state-funded companies.

The draft improves the system for company registration to facilitate the establishment and exit of companies, offers greater autonomy to companies in terms of corporate structure, and improves the capital system for companies.

It also strengthens the responsibility system of shareholders and management personnel, and highlights corporate social responsibility efforts.

Adopted in 1993, China's Company Law has been amended several times. The current version was enacted after an amendment concerning the capital system of companies in 2018.

Wang Ruihe, an official with the Legislative Affairs Commission of the NPC Standing Committee, said the revision is necessary for deepening SOE reform, improving the modern corporate system with Chinese characteristics, optimizing the business environment, enhancing property rights protection, and facilitating the sound development of the capital market.

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